Why I'm Cutting Some Fertilizer Exposure

Cutting 3 of the 4 fertilizer names here as they potentially break down. Historically you want to buy them when they touch the 50 day moving average since they bounce, but with the market acting so poorly, we could get some washout action. Mosaic (MOS) for example *STILL* has a gap in its chart around $110 that I've been eyeing for an entire quarter. (currently just under $130) Just from history, when there is real panic these names drop 10-15% in 1 day. See August 07, see January 08, see March 08. I'd like to buy these portions back in a panic sell.

Cutting about 15-20%ish position in Potash (POT), CF Industries (CF), and Mosaic (MOS).

I was unable to log in yesterday morning, but that spike, once clear it was unable to breach S&P 1275 (old support, now resistance), would have been great to fade with some index shorts and Ultrashort Oil - Gas (DUG). Even though I did not get the prices I wanted, I added them.

The best thing for this market would be to see the type of selling we saw in coal last Wednesday in all the natural gas and oil names. They still have not seen any major pain. The last foxhole to smoke out. The action in financials is simply troubling - Fannie Mae (FNM) is a disaster.

The last time the market bottomed, the fund was down 7-8%ish intraday (and yes I was feeling sick at those moments) before recovering/reversing by the end of the day. So I'm "all in" for now on the long side and won't be purchasing long positions until we get a similar moment. The bounces over the past 6 weeks have been so pathetic it is embarrassing for the bulls. S&P 1260 is now clearly broken, and as we said, S&P 1225 is the next stop (current 1240s). If that breaks S&P 1170s is in the cards. I'll be an active buyer at 1170 if and when....

Disclosure: Long all names mentioned in fund; long Mosaic, Ultrashort Oil-Gas in personal account

Comments

[WACG:]

I have no reason to read your "blog" anymore. Clearly you are clueless. Have a nice day.

2008 Jul 09 09:58 AM

[Carl Martin:]

History suggests that all the stocks just sold could give far better returns by simply holding and forgetting about, as these are all long term plays, and considered to be the no brainers of the decade. Anyone who bought these stocks on aug.5th,2007, and just held them is up hundreds of percent, by now. The author indicates that it's charts, not long term fundamentals, that drive long term plays. I suppose that the author must believe that anyone can just flip a coin and out guess,and thereby outperform, the market. History suggests exactly the opposite. Is he trying to rewrite history?

2008 Jul 09 10:40 AM

[wsigler:]

You two need to go back to the Yahoo boards where you're heroes whenever you slam a seller/shorter..That $hit doesn't play here.

Wayne

2008 Jul 09 10:47 AM

[Carl Martin:]

Dear Wayne, Have you checked out POT's share buy back program? Guess who's buying the shares of the people who are selling.

2008 Jul 09 11:47 AM

[bud357mag:]

Sell,panic, scramble around ,when there is blood in the streets it's time to get a grip and THINK about where you want to be in the future.For me lt's squarly in the coal and ag stocks--------nuff said

2008 Jul 09 12:11 PM

[mythoughts:]

Have you checked the prices of MOS and CF today. I'm glad I bought calls on CF yesterday and sold today for a 70% gain.

2008 Jul 09 02:29 PM

[mwrobison:]

It look's like Trade Mark was right. Mark, are you buying CF and POT today?

2008 Jul 24 11:29 AM